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The Honolulu Advertiser
Posted on: Wednesday, February 10, 2010

A&B affiliate only bidder for raceway

by Andrew Gomes
Advertiser Staff Writer

Alexander & Baldwin Inc. is angling to own or profit from the former Hawaii Raceway Park property in Kapolei.

An affiliate of the local company was the high bidder at a foreclosure auction yesterday for the 66-acre parcel that has been vacant since Hawaii Raceway Park closed in April 2006.

The A&B affiliate, Kapolei Raceway LLC, had bought the mortgage on the property for an undisclosed price in recent months from lender iStar FM Loans LLC.

iStar filed a foreclosure suit in June against California development firm Irongate Capital, which bought the property from Campbell Estate in 2006 for $13.2 million. Irongate planned to develop a 90-lot industrial subdivision on the site and got the land rezoned, but ran into financial trouble before it could realize its plan.

Yesterday, A&B, as the priority mortgage holder succeeding iStar, made the only bid at the auction, according to foreclosure commissioner George Van Buren. A&B used the value of the roughly $12.7 million mortgage debt to make an $11 million credit bid for the property.

A Circuit Court confirmation hearing expected to be held in about a month will allow anyone willing to outbid A&B an opportunity to purchase the property.

The iStar loan was one of two distressed mortgages secured by Hawai'i real estate that A&B acquired in December and January for a combined $16 million. A&B has declined to identify the other property, which also is in the foreclosure process.

Hawaii Raceway Park had been in operation for 42 years, and it was O'ahu's only facility for a variety of automotive racing that included drag races, drifting, motorcycle road races and demolition derbies. Several efforts in recent years to restore the facility, including a proposal for the city to acquire the property through condemnation, were not realized.